​The Financial Conduct Authority has announced that it intends to seek legal clarity on business interruption insurance to resolve doubt for businesses who are facing uncertainty on their claims.
https://www.fca.org.uk/news/press-releases/fca-seeks-legal-clarity-business-interruption-insurance
 
FCA Interim CEO Christopher Woolard said: ‘We have been clear that we believe in the majority of cases, business interruption insurance was not purchased to, and is unlikely to, cover the current emergency. However, there remain a number of policies where it is clear that the firm has an obligation to pay out on a policy. For these policies, it is important that claims are assessed and settled quickly. There are also some other policies where firms may consider there is no doubt about wording and decline to pay a claim, but customers may still consider there is genuine uncertainty about whether their policy provides cover.
 
‘Our intended court action is designed to resolve a selected number of key issues causing uncertainty as promptly as possible and to provide greater clarity for all parties, both insured and insurers. It is clear that decisive action is appropriate given the severity of the potential consequences for customers.
 
‘In addition to this court action, the current emergency has altered the value of some insurance products and we believe that insurers should be looking at both whether their products still offer value. Firms should also look at how they can help customers who may be experiencing financial difficulties as a result of the virus. Many insurers are already taking some kind of action to assist their customers and we want to see a degree of consistency for consumers. Today’s proposed guidance and statement aims to make our expectations clear to all firms in the insurance market and provide future certainty.’
 
In response, ABI Director General Huw Evans said: “This is a welcome step from the FCA and insurers will look to work closely with the regulator to make this process a success. Although the vast majority of business interruption policies do not cover pandemics and the Government has confirmed it will not seek to  retrospectively amend contracts, we support any process that will provide clarity and certainty for the minority of customers who are disputing whether they should be covered. For valid claims, leading ABI members have agreed a set of claims handling principles to ensure speedy processing, including interim payments.”

The FCA has announced it intends to seek legal clarity on business interruption insurance to resolve doubt for businesses who are facing uncertainty on their claims.

​The FCA is also producing new guidance for insurance firms, expecting them to consider whether and how coronavirus may have materially affected the value of their insurance products. The effects of coronavirus may mean that:

• Firms are no longer able to provide expected contractual benefits, either in the expected form, to the expected timeframe, or at all. For example, where fulfilling claims involves service providers whose movements are restricted because of lockdown (e.g. boiler servicing), or some medical covers where customers cannot access certain benefits.
• Underlying insured events can no longer happen for any holders of the policy eg, due to Government lockdown or other circumstances connected with coronavirus, resulting in a fundamental change in risk for the firm.  For example, public liability insurances for businesses that are unable to open, such as hairdressers, bars and restaurants.

 
https://www.fca.org.uk/news/press-releases/fca-seeks-legal-clarity-business-interruption-insurance
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The following changes have been made to the CJRS guidance.
​For full details https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme
 
Employee guidance

• Furloughed employees who are union or non-union representatives may undertake duties and activities for the purpose of individual or collective representation of employees or other workers.
• Confirmation that Company Directors paid annually are eligible to claim.  
• Employees receiving Maternity Allowance during a period of Maternity Leave should not receive furlough pay at the same time. 

 
Employer guidance: eligibility

• Updated in line with changes to Employee guidance.
• CJRS grants are not classed as state aid.
• Changed the date from 28 February to 19 March 2020 in the section on TUPE transfers and payroll consolidation.

 
Employer guidance: how to calculate the grant

• The June daily maximum wage rates have been added to the table now the scheme has been extended.
• Improved clarity in the employer National Insurance contributions section, confirmed the direct percentage method or tables method can be used and added new information for company directors.

 
The scheme opened for applications last week on Monday 20th April, this week the first grants have been paid.
 

​

 
Background
 
On 7th April the Welsh Assembly issued a guidance note for accommodation providers in Wales on the interpretation and implementation of The Health Protection (Coronavirus Restrictions) (Wales) Regulations 2020. These regulations came into force on 26 March 2020 and will remain in force until 26th September, although the Welsh Ministers have the power to extend the restrictions under them beyond this period.
 
While the Regulation do not expire until 26th September 2020, the Welsh Ministers are required to review the regulations every 21 days (the first review was on 15 April 2020) to determine whether they are appropriate for the current circumstances and, if not, to modify the regulations accordingly.
 
 
The Regulations and Accommodation Businesses
 
Under the Regulations, with limited exemptions, all holiday accommodation businesses are required to remain closed until further notice. They can, however, continue to provide information or services online or by telephone or post. This is to enable accommodation businesses to communicate with customers to provide information, including on potential future bookings.
 
The guidance states that due to the restrictions put in place by the Regulations, the Government is not able to specify any dates from which businesses could consider taking bookings without breaching the obligations to close their businesses and to keep those businesses closed and notes that businesses will not be able to honour any bookings until such time as the restrictions are lifted. As such, any bookings taken are at the businesses’ and consumers’ risk.
 
While that guidance is clear that bookings should not be taken to provide accommodation for any period that the businesses are required by the regulations to be closed, the guidance also states that the regulations themselves will be reviewed every 21 days. This has led to confusion within the accommodation sector as to the status of both existing bookings and accepting bookings more than 21 days in advance.
 
 
 
 
 
Our Interpretation of the Guidance
 
There are two main situations that should be considered.
 
1.Existing Bookings
If you have an existing booking that is within 21 days of the last review of the Regulations, and the restriction on the opening of holiday accommodation remains, then this booking cannot be completed and a force majeure situation exists. The outcome of this in terms of costs will depend on the terms and conditions of the contract between the two parties.
If you have an existing booking that is outside the 21 day review period, then there remains a possibility the next review of the Regulations could result in an amendment to the regulations that could allow the contract to be fulfilled. In this case, because there is a possibility that the contract could be fulfilled, if either party cancels the contract, then they are liable for the costs associated with that cancellation.
 
However, because there is a significant risk that the restrictions on opening will continue, we would advice businesses to contact customers who have existing bookings for the period between the next review and 26th September to inform them of the situation and agree what will happen if the booking cannot be fulfilled.
 
2.New Bookings
It would be counter to the regulations to take any booking for a period within 21 days of the last review of the regulations as it will be impossible to fulfil that booking.
 
However, we believe that it is possible for a business to take a booking for a period between 21 days of the last review and 26th September as there is the possibility that a future review of the regulations could result in an amendment that allows the business to open and fulfil the contract.
 
In this situation, it is important that, for the avoidance of all doubt, that there is a written agreement between the business and the customer as to what happens if the current restrictions on accommodation businesses opening remain in place and the booking cannot be fulfilled. This could be that any payment is refunded or the booking is rolled forward to a new date at no cost.
 
 
Important Note: This note outlines our interpretation of this guidance as it applies to accommodation businesses in Wales. It must be noted that does not constitute legal advice and further clarification from the Welsh Assembly may render this interpretation void as of the 20th April 2020.
 

Participants
Deputy Minister, Culture, Sport and Tourism
Stephen Jones - WLGA
Jason Thomas - Director Welsh Government
Paula Ellis- SW Forum Chair
Rob Holt - Welsh Government
Phillipa George - SE Forum Chair
Rhidian Morgan - Welsh Government
Sean Taylor - UK TIC Rep
Lucy von Weber - Welsh Government
Anthony Rosser - Uk Hospitality Cymru
Peter Francombe - Welsh Government
Dave Chapman - Uk Hospitality Cymru
Ian Edwards - VB Board rep
Michael Bewick - North Forum Chair
Andrew Campbell - WTA
Adrian Greason-Walker - WTA
Steve Hughson - Mid Wales Forum Chair
Mari Stevens - Welsh Government
Jo Corke- Welsh Government
 
Main points of meeting
Update – Jason Thomas
JT thanked all for joining the meeting and updated as follows:

• Issues raised by the group in last week’s meeting had been escalated and flagged internally, such as concerns around insurance companies, and externally at UK levels via various Ministers meets.
• Many of the issues were common across the UK and many decisions lay with UK Government and specifically Treasury i.e. the decision to extend the furlough date to 19 March.
• The WG Economic Resilience Fund (ERF) grant scheme, initial £200million - was up and running since the morning and, as expected, demand was very high. JT urged the sector to get applications in promptly and to encourage others to apply and Visit Wales (VW) had issued a further newsletter to encourage this.
• The Deputy Minister emphasised that tourism was fundamental to the economy all over Wales and to the renewal process when we emerge from the crisis, and that this group had much to offer in shaping that. 
• MS suggested this group had a dedicated discussion at a future meeting about rebooting the industry and developing winter product etc.
• JT said there was a live piece of work ongoing at Wales and UK levels as to which elements of the sectors should come out of lockdown first and how that might happen.  He recognised the difficulties for tourism in this context but asked the group to consider and feedback.
• The second homes/business rates loophole continued to be an issue. Local authorities were meeting about this later today and the Minister for E&T was attending. Sector colleagues felt this behaviour to be unethical, but did not want bona fide tourism businesses to suffer as a result.

  

1. Issues arising from the update from sector representatives

 
- The meeting was aware of the issues around B+Bs who paid Council Tax not business rates missing out on support and noted the Scottish Executive had sought to address this and asked that this be explored in Wales, JT confirmed this would be fed back.
 
-Information on the end date for furlough desperately needed, especially in view of possible redundancies – what would be happening and how would it be handled? NB: decision to extend furlough to end June confirmed later in the day.
 
- the extension of the furlough arrangement to capture those in employment before 19 March was welcomed.  But it was thought that this change did not capture many additional people and that had it been taken up to 31 March it would have helped more people.   JT confirmed this point had been made at a UK level.
 
- There was concern around restrictions staying in place until end of September. It was felt that if the policies around social distancing (SD) remained in place for hospitality then the furloughing scheme should stay in place as, for example, restaurants could not operate at full capacity, with all staff, with SD rules in place .   
 
-There was also a real concern about a second wave of the virus in October 2020 – we needed to prepare for this.
 
-there was a growing concern from hotels that Government still did not understand the hospitality sector and its importance to the foundation economy.  Cash was required, not loans – there was a real fear that the foundations of the sector were crumbling, with iconic businesses folding. Social distancing post lockdown would causes real problems for the sector and “3 winters” were likely.
 
-JT acknowledged that tourism, hospitality and events were in the first wave of businesses hit, and that they would potentially emerge in a fallow period so the whole effect could last for about 18 month.  From the outset VW/WG had understood the importance of cash flow to the sector and reiterated the importance of the sector applying for the ERF grant scheme. The DM reiterated his support for the sector and that he fed in the importance of, and concerns from, the sector to the First Minister and other Ministers on a daily basis.
 
-The importance of the sector and its concerns re the future, for the sector, the wider economy and local communities, were reiterated by the stakeholders. Despite the reassurances from the Minister and officials they felt compelled to write further to the Welsh Government and UK Government to emphasise the concerns of the group which represented interests across Wales. 
 
-The ERF grant scheme was welcomed but concerns were raised it could end up supporting less-viable businesses.   There was also concern that there had been confusion on the criteria e,g. around the need to have refusal from a bank before applying to the DBW,  the application of rate relief grants and information about a sustainable business – how could this be predicted in this climate? There was a call for swift, and accurate, dissemination of information to the sector from WG/VW especially where things had changed.
 
- JT recognised the concerns but pointed out the priority, as identified by the Tourism sector and many other sectors, was getting cash out to business quickly, launching a £200m scheme and recruiting and inducting 140 staff in 10 days was unprecedented, however there would inevitably be  glitches.  MS said she would look at this more closely and perhaps include illustrative examples to help with understanding and perceptions going forward but noted the ownership of the scheme lay outside VW.
 
-A question was raised about whether there should have been a tourism-specific VW fund. JT pointed out VW was part of WG and like all parts of WG its non-contracted funding had been repurposed to the Covid efforts and that it was highly likely tourism had benefitted more as a consequence of being part of the wider fund. 
 
-It was also noted that the Business Rate relief holiday only applied to the Retail, Leisure and Hospitality sector which reflected the scale of the impact on businesses in those sectors. 
 
-attractions were concerned that loans did not offer security for them and some felt they might have to close. More positively some attractions had been doing some detailed business planning around reopening with social distancing and lower numbers of visitors. However guidance on hygiene planning and health and safety would be welcome.
 
-Another concern was that skilled workers might move into other sectors who might recover better/quicker and the sector would lose its workforce. RH confirmed that WG was feeding in at a Wales and UK level on this.
 
-B&Bs and glamping were being hit hard with many falling between the funding gaps. Loans and furlough arrangements helped but there was a real danger of insolvency in the future if borrowing. Instead of delaying VAT payments could a grant be considered instead?
 
-Insurance – there remained ongoing concerns re the behaviour of insurers and it was noted there was a clause in many insurance policies that if a property was unoccupied for 90 days and you did not request an extension then your insurance could be exempt.  There was a need for this to be linked to legislation as people were not able to open. JT said he would like this, and other “top tips”, to feature in a future Industry newsletter.
 
-WLGA noted it was a matter for the Treasury to channel more money to Wales otherwise businesses would not survive- appeal to WG to keep up the pressure on UK Government.  It was acknowledged that there were ongoing business rates issues which WLGA and LA’s were considering and it was also noted LAs have many roles including regulator post lockdown in relation to social distancing, hygiene etc.  The sector asked for regulation to be “proportionate”.
 
-IE had just come out of a VB Board meet looking at recovery and reported that VB would be aiming its future marketing at a domestic audience taking account of when and how restrictions might be lifted e.g. considering deep cleaning, H&S, social distancing etc  VB also considering campaign around NHS works “You pay they stay” – a reassurance campaign. MS would continue to link in with VB.

1. Terms of Reference

 3.1 The terms of reference of the group were noted (subject to the below re sub groups) and the representatives on the group felt strongly that any requests to add to the composition of the group could only be considered if genuine gaps in representation were identified and all Wales representation could be evidenced. WG/VW would continue to consult the group on relevant requests.
 
3.2 There was a suggestion that as matters progressed and we moved forward to discuss in more detail issues such as marketing, pricing, targeting etc then it might be useful to have sub-groups to look at some of the detail and there would be a need to draw in wider expertise and views. The TOR should make reference to potential subgroups. (AGW)
 
3.3 JT asked the group to consider the TOR and let AB have any further comments by 23 April.

1. Mental Health support – Andrew Campbell

4.1 AC referred to the need for other forms of support which might be needed in addition to financial support.  This was a worrying time for so many and it was suggested we give more visibility to mental health.  MS would consider this in the industry newsletter etc. and proposals could be worked up.

1. AOB/Next Meeting

5.2 JT proposed that the next meeting covers:

• preparing for easing of restrictions
• potential plans/gaps for the any further ERF 

 
5.3 JT and the DM thanked all for the robust, but constructive discussions that had been held which had re-emphasised the very real concerns of the industry. JT and DM reassured those present that the WG did understand the huge challenges being endured by the sector and asked colleagues to urge businesses to apply for funding.
 
5.4 JT confirmed that minutes when circulated could be shared, noting that anything sensitive or commercially confidential should be declared during the meeting so as not repeated in minutes.
 
 
Alyson Burke
17 April 2020

• FCA letter to Insurers

One of the ongoing issues for many businesses is the response that they are getting from their insurers when trying to claim costs related to business interruption. It’s a problematic issue because, as a general principle, Government doesn’t see that it’s place to become involved in disputes between businesses over the terms of contracts. However, the Financial Conduct Authority has issues guidance to insurers as to how they expect them to behave when considering claims from businesses
 
https://www.fca.org.uk/firms/insurance-and-coronavirus-our-expectations
 
To emphasise their expectations of insurers, the have now written to them setting out how they are expected to behave with regard to SMEs and pointing out that companies with a turnover of less than £6.5m and employing less than 50 people can see redress through the Financial Services Ombudsman
 
https://www.fca.org.uk/publication/correspondence/dear-ceo-insuring-sme-business-interruption-coronavirus.pdf
​

The Westminster All-Party Parliamentary Group for Hospitality and Tourism is today launching ‘Pathways to Recovery,’ urgent inquiry into the measures that businesses in these two vital sectors of the UK’s economy will need in order to successfully reopen, recover and thrive in the aftermath of the COVID19 crisis.

The key focus of this inquiry will be assessing what is needed to get businesses back on their feet at the appropriate time, providing forward-looking recommendations to guide Government and businesses as they move to thinking about recovery. The consultation questions will look broadly at what support measures businesses would like to see from Government, while also looking at the internal and operational challenges that businesses face when looking to reopen. There will be four key themes: • Government support • Achieving business compliance • Supply chain re-activation • Stimulating demand for the sector

The need for this inquiry is immediate and as such, by design, the time for gathering evidence will be short. The aim is to publish findings and report in full by the middle of May, however, they may push forward the publication date in order to feed findings into Government while important discussions on recovery are being held.

If you wish to respond to ‘Pathways to Recovery’ please answer the relevant consultation questions below and send your submissions in to Richard Clifford at rclifford@ukhospitality.org.uk. The deadline for submissions will be May 1st at 5:00pm. Consultation Questions
1. What further, or continued, financial measures do you envisage your business needing from Government in the recovery period when restrictions begin to be lifted? If relevant, please refer to both national and devolved Governments.
2. What impact would a staggered reopening have on your businesses? (For example, if businesses are permitted to reopen but with existing social distancing measures retained; hotels open with no bar or restaurant area; or a cap being introduced on venue numbers)
3. What specific operational difficulties do you anticipate when looking to reopen your business and will you need Government assistance and guidance ahead of this?
4. How long will it take for businesses to change or reactivate their supply chains and what difficulties may be present in doing this?
5. What, if any, more guidance do you feel that you need on cleaning and hygiene measures ahead of reopening?
6. What fiscal measures should be taken to boost business in the hospitality and tourism sectors in the immediate aftermath of COVID-19 restrictions being lifted?
7. What steps should the Government take to boost UK inbound tourism when social distancing measures are lifted?
8. Are there any other key areas of support that your feel either sector, or your individual business, require outside the scope of the above questions?
If so, please outline in under 500 words.

BEIS has produced a list of 15 rules and regulations that have been relaxed in order to support businesses impacted by Coronavirus. These range from carrying forward annual leave through to taxable expenses associated with employees working from home.
 
https://www.gov.uk/guidance/rules-that-have-been-relaxed-to-help-businesses-during-the-coronavirus-pandemic
​

DCMS Select Committee have launched an inquiry on the impact of Coronavirus on all sectors under DCMS’s remit.  In particular, the Committee is interested in finding out:
 
• What has been the immediate impact of Covid-19 on the sector?
 
• How effectively has the support provided by DCMS, other Government departments and arms-length bodies addressed the sector’s needs?
 
• What will the likely long-term impacts of Covid-19 be on the sector, and what support isneeded to deal with those?
 
• What lessons can be learnt from how DCMS, arms-length bodies and the sector have dealtwith Covid-19?
 
• How might the sector evolve after Covid-19, and how can DCMS support such innovation todeal with future challenges?
 
The deadline for written evidence is 1 May 2020 – Here is this link to the website https://committees.parliament.uk/work/250/impact-of-covid19-on-dcms-sectors/
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